The week gone by was one of consolidation and markets were more circumspect after the massive rally in the previous week. The BSESENSEX gained 71.51 points or 0.29% to close at 27,717.99 points while NIFTY gained 24.85 points or 0.33% to close at 7,510.20 points. The budget disappointment and then the realisation that it is growth oriented and aiming towards infrastructure and agriculture saw markets gaining ground.
Parliament has started functioning and they have started doing legislative business and not just sloganeering and disruption. AADHAR bill has been passed and under this this would be mandatory to received subsidies of any kind direct from the government. This bill or instrument has helped cut down leakages in the system which was crippling the economy. The intention of giving aid, assistance or subsidy was well meant but leakage along the way ensured that the intended beneficiary got a trickle of what he was supposed to get.
The week ahead will see the US Federal Reserve take a call on what should be done with interest rates going forward. Our own RBI would be meeting in the beginning of April to review the monetary policy and take a call on reducing rates if any.
OFS or offer for sale of the Government of India seems to have its share of controversies each time there is an offer. This time in the case of CONCOR (Container Corporation) retail investors who bid at cut-off were left high and dry and got no allotment whatsoever. Its providence that they did not get allotment as the share subsequently tanked and fell below even the 5% discount price. The very idea of cut-off is the price at which shares are allotted and announcing the same before bidding begins based on the nonretail book is misleading and self-defeating. This is so simply because the nonretail portion does not include a discount and there would be enough people willing to sacrifice a portion of the discount to be allotted shares. I suggest that in future the stock exchanges and the regulator must come to common ground and ensure that the cut-off price is finalised based on bids received at the end of the bidding period. This would ensure that the price is equitable. It may also be mentioned that in almost all cases this discovered price which would then become the cut-off price would be higher than the non-retail portion.
Vijay Mallya is all over media and his leaving the country is attracting attention. The wilful defaulter tag is not helping and numerous charges of fund diversion are doing the round. What will be the outcome is certainly not known but this is an issue that would be there for quite some time. The heat on other wilful defaulters is certainly going to increase.
Markets would remain choppy in the week ahead and trading opportunities would exist. Trade cautiously.
